Interest rate decision: Benchmark rate remains unchanged
What a difference a few months make. In 2018 the Canadian economy was set to outpace its growth projections, prompting the Bank of Canada to swiftly increase the benchmark rate 3 times. The Bank of Canada cautioned Canadians about the likelihood of 3 additional increases in 2019.
3 months into 2019 and all the talk of interest rate hikes is all but gone.
This morning the Bank of Canada made their 2nd interest rate announcement for 2019. As was widely anticipated by economists and observers, the benchmark rate remained unchanged at 1.75%, which translates into 3.95% for the retail bank prime rate.
Some of the highlights in their press release include the following:
- Slowdown in the global economy has been more pronounced and widespread than the Bank had forecast in January
- Here in Canada, consumer spending and the housing market were soft, despite strong growth in employment and labour income
- The Canadian economy will be weaker in the first half of 2019 than the Bank projected in January
If you would like to read the entire press release click here.
How will this change my interest rates?
Currently the retail bank prime rate is sitting at 3.95%. There will be no changes to your payments if you are in a variable rate mortgage or have a line of credit based on prime.
Is now the time to lock-in to a fixed?
Based on current economic projections for 2019 the risk of increases to the prime rate has subsided. If you’re carrying a variable rate mortgage I don’t recommend converting to fixed at the current time.
Want to chat?
Let’s set up a time to talk! I just came back from our annual sales conference in Mexico where we had a presentation by the chief economist of TD Bank, who gave us some insights on how TD is seeing the next few months unfold.
The next Bank of Canada meeting is scheduled for April 24th 2019.
You can contact me here or book a call into my calendar below.
